America or the hands of the bankers of the United States in Holland. In order to have a correct view of the expense, it is necessary to take into consideration not only the quantity, but also the application, of the moneys stated, under the head of "reduction of public debt," to have been applied to the purchase of that debt, as not only the nominal amount of the debt thus purchased is much larger, but even its real value exceeds the moneys thus applied.

The statement No. XI. exhibits a view of those purchases as made by the commissioners of the sinking fund. The total amount of moneys applied to purchases by them was dollars 1,618,936; the nominal amount of the different species of stock purchased by them, dollars 2,307,6617; the real value of the said stock, estimating the six per cent. stock at par, the deferred stock at 75 per cent., and the three per cent. stock at 60 per cent., dollars 1,880,92135; which last sum exceeds the amount of moneys applied to purchases by dollars 261,985-36; which reduces the excess of expenditures beyond receipts to dollars 2,966,975,876.

Several other considerations of less importance, but which might, however, affect in some degree that result, are omitted here; but those of a general nature will be taken notice of either in the course of this section or when the subject of the debts of the United States comes under view; and those which relate merely to details will be found, in the shape of notes, annexed to the statement No. X.

A deficiency caused by an excess of expenditures over the receipts must always be supplied by new loans, and create an increase of debt. It is commonly owing to the extraordinary expenses which attend a war, and although not the unavoidable, has with most nations been the usual result of every one in which they have been engaged during the present century. Great Britain and France, either unable or unwilling to draw from their subjects a revenue equal to the prodigious waste of money which attends modern wars, have uniformly supplied by loans the greatest part of that expense, and raised taxes only to the amount of the interest of those loans. Such a system, managed with ability and supported by prosperity, may last for a

long period of time. Its ruin may be accelerated by a general convulsion, or by any of those extraordinary events which considerably diminish the general resources, the commerce, the wealth, the annual income of a nation; but its natural existence seems to be limited only by the ability of raising a revenue in taxes equal to the interest payable upon the debt. But it has been unusual to see a nation so improvident as to suffer in times of peace and prosperity its expenses to exceed its revenue and its debt to increase. In France, where the prodigality and mismanagement of the government, united to an injudicious selection of taxes and to the exemptions claimed by some classes of the nation, had indeed produced such an effect, the consequences are but too well known.

There is, however, some apology to be made for the United States. A government in its infancy, with a heavy weight of debts, cannot, without oppression, raise at once from the people the same amount of taxes which, if laid gradually, would not be thought burdensome. It is, however, their duty under such circumstances to proportionate their expenses to their ability; and this was the case during the first years of the existence of the present government; for it will appear from the statement No. X. that no deficiency of revenue took place till the year 1792. It may also, perhaps, be said that, although we have not been engaged in the European war, the circumstances of that war and some domestic occurrences have necessarily involved us in some extroradinary expenses. Amongst these are usually reckoned the increase of the military establishment due to the Indian war, the naval armament, the fortifications of our harbors, the treaty with Algiers, and the expedition of the militia employed to suppress the western insurrection. It must, however, be remarked that the increase of the military establishment and the naval armament have not been considered by government itself as an extraordinary, but as a permanent, object of expense; for, notwithstanding the discontinuance of those causes which served as a pretence for both objects, the same number of effective men has been retained in the land service, and nearly the same annual expense is necessary to support our present naval establishment. The total expense of the naval

armament incurred before the year 1796 amounts to 470,000 dollars; that of the fortifications only to 120,000; the moneys were voted in March, 1794, and by far the greatest part expended only in 1795. The expenses attending the conclusion of the treaty with Algiers are not yet fully ascertained, but may be estimated at 800,000 dollars; the money was voted, also, in March, 1794; a very inconsiderable part, if any, was raised before 1795, no part paid to Algiers till the latter part of the same year, and the payment not completed till 1796. It is, therefore, evident that the plea of urgency, so far as relates to those various objects, cannot avail; that a sufficient time elapsed between the originating of the expense and the application of the moneys to have raised an adequate revenue. Three hundred thousand dollars were appropriated in the same month (March, 1794) for the purpose of replenishing the public stores and magazines, making repairs, &c.; but it does not clearly appear from the official documents how much of that sum has been expended, or at what periods. The accounts of the militia. employed to suppress the western insurrection are not yet published; but there were appropriated for that purpose by Congress 1,122,569 dollars for the expedition itself, and 100,682 dollars for the detachment of militia stationed there for some months after the return of the main army; both sums amounting together to 1,223,251 dollars. This, or at least the firstmentioned sum, is the only article which seems properly to fall under the head of extraordinary expenses. It was unforeseen, and, allowing it to have been necessary to that extent, must from its urgency have been incurred before a revenue could be raised to discharge it.

It is difficult to ascertain whether any of those expenses, permanent or extraordinary, might have been avoided; whether, although perhaps all in some degree useful, they were all necessary; for the decision of the question must, more than any other, depend upon opinion. In the opinion of the writer of these sheets, there are some which were unnecessary. Without laying any great stress upon what savings might have been made in the civil list and in some of the annuities and grants, which could not, at all events, amount to a very large sum, since the annual

expense for both items is but about 450,000 dollars; without taking into view the 90,000 dollars already expended upon the mint establishment, without any apparent advantages having been derived from it, it will be sufficient to attend to some of the most important objects.

First. It will be demonstrated in the next section, which treats of the debts of the Union, that out of the sum of near 21,800,000 dollars, in debts of the individual States and balances due to the same, which have been assumed and funded by the Union, near 10,200,000 dollars have been assumed beyond the sums in those debts and balances, which it would have been necessary to fund in order to place the accounts of the Union and of the individual States in the same relative situation in which they now stand. The interest actually paid out of the Treasury upon that excess (exclusively of 700,000 dollars interest accrued and not paid, but funded, upon the balances due to the several States; which item makes an increase of debt instead of an article of expense), together with two per cent. paid on part of the principal on the 1st of January, 1796, amounts to dollars 1,198,202; which are an unnecessary expense, arising from an unnecessary assumption of debt, and which must continue till the debt itself is discharged.

Secondly. It is highly probable that the protection of the frontiers might have been effected with a less number of men, and the men in service supported with less expense; what might have been saved on this head cannot be calculated; the following data may, however, assist in forming some idea of it. The troops of the United States engaged on the frontiers, from the peace of 1783 to the year 1790, a period during which the inhabitants were as effectually protected as they have been since, did not exceed eight hundred men. When what has been called the Indian war began, the hostilities of the Indians were not greater than they had been before; they consisted of that petty warfare so cruel and distressing to the frontiers, but always experienced, both in peace and in war, from those tribes which are not nearly enclosed by the settlements, and which could be checked only by the possession of the posts on the Lakes. The number of soldiers had been previously nominally increased to

twelve hundred men in April, 1790, and to two thousand one hundred in March, 1791. Another nominal increase took place in March, 1792, after General St. Clair's defeat, which should have raised the army to 5200 men. A farther addition of near 800 artillerists was made in May, 1794. But it appears that the number of effective men never much exceeded three thousand. The annual expense, including the Indian Department, averaged 220,000 dollars during the three years 1789, 1790, and 1791 (which includes about 100,000 dollars extraordinary expense of General Harmar's campaign in 1790, and a part of the expenses of the campaign of 1791, under General St. Clair). The annual expense during the years 1792 and 1793 exceeded 1,100,000 dollars, and during the years 1794 and 1795 (after deducting fortifications, expenses relative to the western insurrection, and extraordinary purchases of arms, &c.) averaged 1,750,000 dollars. The number of troops actually employed has increased in the ratio of four to one from the year 1790 to 1795; the the expense in the ratio of eight to one.

Thirdly. The naval armament, which, on its present plan, seems to be rather an object of parade than of real utility, has already cost 470,000 dollars. To complete the six frigates first intended to be built would, according to the last estimate of the Secretary of War, have cost 1,142,160 dollars, manning and provisions not included. Whether it is proper for the United States at present to create a navy is a question equally delicate and important; but it would seem that, if it is to be determined in the affirmative, the same sum which is necessary for beginning six frigates and finishing three might have been more usefully applied in laying the foundation for a real navy by the purchases of timber, materials, &c., and by preparing all those things which time alone can procure.

Fourthly. The call of about 15,000 militia and the expenditure of twelve hundred thousand dollars for the purpose of suppressing mobs and riots committed but partially in a country which contains only 70,000 souls, must have been grounded upon mistaken ideas of the views, union, and strength of those concerned, and upon misrepresentations of the sentiments of a great proportion of the people there. It is believed that it will